A lottery bet that failed to pay off

By Jason Dowling

7 August 2010 — 3:00am

THE performance of beleaguered lotteries and scratchie operator Intralot has been scrutinised by Victoria's gambling watchdog with a confidential performance report sent to Gaming Minister Tony Robinson this week.

Intralot's sales have been well below government expectations and the company has again failed to meet its financial year sales target outlined in its licence agreement.

Yuan Wu had Intralot for two years and he says sales are slow, the terminal is slow and he barely covers costs. Picture: Rebecca Hallas

Intralot products such as Lucky Keno, Lucky 5 and Lucky Lines have received a tepid response from consumers and agents are complaining they are barely covering costs.

While Mr Robinson is not saying what is in the confidential report that he demanded from the Victorian Commission for Gambling Regulation (VCGR), he has raised questions about the company's sales performance in the past and last year fined the company $30,000 for failing to run a televised bingo game.

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Intralot has failed to achieve its licence agreement sales forecast for the 2009-10 financial year after falling well short in 2008-09 - resulting in less lotteries tax revenue for the state government.

Last week Mr Robinson announced the three companies invited to apply for Victoria's multibillion-dollar wagering licence. Intralot did not make the cut.

But the Greece-based company has scoffed at suggestions it may be considering quitting its 10-year licence in Victoria.

Intralot Australia acting chief executive Leo Watling released a statement in June titled ''Intralot Australia is not going anywhere''.

''We are currently trading in our third year of a 10-year licence for Category 2 gaming products in Victoria and Tasmania. We had always anticipated that the first few years would be loss making due to the substantial investment required to develop this current licence and other opportunities in the region,'' he said.

Intralot says contractual agreements between Tattersalls and many agents setting out ''dedicated areas'' for Tattersalls products in stores - usually the best counter space - had a big impact on Intralot sales.

''Leading industry figures believe the removal of the dedicated area would see our sales significantly increase,'' Mr Watling said in the statement.

It is believed Intralot is actively pursuing at least two other gambling licences in Australia.

Agents have blamed poor Intralot sales on IT problems with terminals, poor advertising and confusing and unattractive games.

Yuan Wu has run his lotteries agency at Wales Corner on Collins Street for 10 years.

He said Intralot sales were slow and the terminal was slow.

Mr Wu said he had been waiting six months for his terminal to be switched from a wireless connection to a hard-line connection.

''Sometimes you get so frustrated [with the terminal], customers can't wait,'' he said. ''It is very hard to bring people back.''

He said he was just covering the weekly cost of offering Intralot products.

The Victorian Authorised Newsagents Association chief executive, Peter Cowley, said newsagents were not making anywhere near the returns that they hoped from Intralot.

Questioned about the company's performance, Mr Watling said in a statement to The Age : ''Sales are trending upwards and our relationships with our vendors - lottery agents and newsagents - have never been better.''

He said 600 stores had been converted from wireless to ADSL - ''as a result reliability has increased significantly''.

Opposition gaming spokesman Michael O'Brien said Intralot's arrival in Victoria had been ''a mess for taxpayers and it's been a mess for lottery agents''.

CBD Intralot agent Robert said he had not seen an improvement in Intralot sales for two years. But Robert will not be handing back his Intralot terminal. ''No point really. They keep bleeding losses - they won't last long,'' he said.